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Wellington Management Company LLP

PRI reporting framework 2018

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Outputs and outcomes

LEI 12. How ESG incorporation has influenced portfolio composition

12.1. Indicate how your ESG incorporation strategies have influenced the composition of your portfolio(s) or investment universe.

Describe any reduction in your starting investment universe or other effects.

Clients with socially responsible investment (SRI) objectives may wish to integrate restrictions in their mandate guidelines, and we have assisted several clients in the development of investment “screens” or complete investment styles that seek to achieve specified investment goals while complying with the restrictions. These client SRI issues extend across a broad range of social concerns including tobacco, gambling, alcohol, weapons, pornography, labor issues, as well as specific countries like the Sudan.

Specify the percentage reduction (+/- 5%)

%

Describe any alteration to your investment universe or other effects.

Portfolio Managers develop their own investment approaches, whereby ESG considerations are integrated into their research and decision-making processes to the extent that they believe these issues may affect the long-term success of a company and investment returns.

For example, our Global Impact strategy is underpinned by 10 primary impact themes that define the investable universe for the product. Another example is the theme of electrification of transportation, which is pervasive throughout many of the diversified strategies we manage. Diversified portfolio managers look to the combined work of Global Industry analysts and ESG analysts to discern which companies and industries are best positioned to capitalize on this theme.

Select which of these effects followed your ESG integration:

12.2. Additional information.[Optional]


LEI 13. Measurement of financial and ESG outcomes of ESG incorporation

13.1. Indicate whether your organisation measures how your approach to responsible investment in Listed Equity has affected your portfolio’s financial and/or ESG performance.

a) Funds’ reputation

Describe the impact on:
Describe the impact
Which strategies were analysed?
Funds' reputation

Which strategies were analysed?

Describe the impact on:
Describe the impact
Which strategies were analysed?
Funds' ESG performance

13.2. Describe how you are able to determine these outcomes.

Measurement of reputational impact is qualitative in nature and comes from conversations and feedback from clients and prospects who request additional information during due diligence based on the Morningstar Globe Ratings focused on sustainability and sourced from Sustainalytics data. We are not aware of any clients or prospects who declined to invest in one of our strategies due to the fund's sustainability rating.

Measurement of ESG performance is quantitative in nature. One example is part of the firm's ongoing competitive intelligence efforts. All Wellington funds that are loaded into Morningstar and have a sustainability score are analyzed on a quarterly basis to assess any changes in the ratings. This allows us to identify which funds are improving relative to their peer category. Another example of assessing ESG performance over time is to assess trend reports for a given portfolio using our proprietary internal ESG ratings.


LEI 14. Examples of ESG issues that affected your investment view / performance (Private)


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